BSAB 450 Airline/Airport Marketing Assignment 2.5 – Module Review by Chan Hsing Joo Cheryl ID: 2101610 Embry-Riddle Aeronautical University Worldwide Jan 2016 1
BSAB 450 Airline/Airport Marketing Part 1: Review Questions 1. Elaborate on each of the components found in the PESTE model and their application to the airlines industry. Political The airline industry operates in a highly regulated political environment where changes in government influence and can have huge significance passengers. This is due to the fact that passenger safety is paramount and the political establishment have been made weary of the airlines and resorted towards strict regulations for their operations, due to their inclinations towards monopolistic behavior. Furthermore, with there being more competition in the industry and regulations in demand, passengers are in a position where they can push for lower prices and amenities ( Makos, n.d.) . Because political changes are closely tied up with legal changes. Laws are continually being updated in a wide range of areas, e.g. consumer protection legislation, environmental legislation, health & safety and employment law. Economic The 9/11 attacks left a major impact that the airline industry is yet to recover from. The prolonged recession, fluctuations in oil prices and an imminent global slowdown are other debilitating factors that are affecting the growth of the airline industry. Other economic changes that affect airlines include changes in the minimum wage rates, and the rate of inflation. Airlines have to cope with declining passengers, high fuel prices, competition from low-cost airliners, labor demands and soaring operating and maintenance costs. In addition, unforeseen events such as the disappearance of Malaysian airline in 2015 also adversely affecting the global airline industry. Social 2
BSAB 450 Airline/Airport Marketing Over the years, the millennial generation’s emergence into the consumer class has resulted in major social changes, more importantly in terms of service, where consumers have become much more demanding. An understanding of social change gives business a better insight for the future market situation. And to meet the increasing demands of this segment, airlines have to stabilize their costs. Additionally, the passenger profile has changed as well with there being more economically minded passengers. When it comes to business class passengers, improved communication facilities have reduced the need to fly down for meetings. Technological With intense competition in the airline industry, airliners must adapt latest technology development in order to survive in the already tough environment. Additionally, the use of latest technology in aircrafts would not only lower fuel consumption, but also the cost of airline operations and improve efficiency.
You've reached the end of your free preview.
Want to read all 9 pages?
- Summer '19
- Airline/Airport Marketing